The German biotech Evotec and Johnson & Johnson ($ JNJ) have the inside track on drug development based on a Harvard lab's discovery of a hormone that spurs replication of insulin-producing beta cells. The finding opens the door to a novel mechanism for treating diabetes, yet researchers caution that the impressive data in mice have some time to go before they are replicated in humans.

Harvard stem cell researcher Doug Melton and his post-doc fellow Peng Yi completed experiments that homed in on the hormone called betatrophin, which controlled beta cell proliferation in mice and is found in humans. Their work appeared this week in the marquee journal Cell. Evotec licensed rights to the work in 2011 and sublicensed the intellectual property to J&J's Janssen Pharmaceutical last year, when the drug giant joined the German biotech company, Harvard and the Howard Hughes Medical Institute (HHMI) in a collaboration called CureBeta.

As Bloomberg reports, shares of Evotec jumped as high as 7.2% today in trading in Germany. And the company has been rewarded for participating with other pharma groups in panning for scientific gold in academia, a strategy that more companies have pursued as they reduce their internal discovery operations.

The pharma collaborators could be three or four years away from testing a drug based on the discovery in humans, Evotec's chief scientist Dr. Cord Dohrmann told The Boston Globe. And other researchers tried to quiet any potential hype from the discovery amid the battle to control the diabetes epidemic, which affects more than 25 million Americans and 370 million people worldwide, suggesting that the era of injecting insulin and taking other meds to combat the disease is far from over.

"You've got to calm down; everybody's got to take a step back from saying the cure is here," Dr. John Anderson, president of medicine and science at the American Diabetes Association, told the Globe. "It's a great path to be on. They are to be admired for this research. … Their work at Harvard has really helped in understanding beta cell physiology and offered new targets for how we might intervene in diabetes."

For Janssen, the discovery boosts the future prospects of company's young diabetes drug franchise, which gained its first FDA approval in March for Invokana (canagliflozin) in Type 2 diabetes.